Which of the following statements regarding the cost-benefit analysis is NOT correct?
A) The first step in evaluating a project is to identify its costs and benefits.
B) In the absence of competitive markets, we can use one-sided prices to determine exact cash values.
C) Competitive market prices allow us to calculate the value of a decision without worrying about the tastes or opinions of the decision maker.
D) Because competitive markets exist for most commodities and financial assets, we can use them to determine cash values and evaluate decisions in most situations.

Question

Quizplus · Accepted Answer

The statement "In the absence of competitive markets, we can use one-sided prices to determine exact cash values" is not correct. In the absence of competitive markets, it is difficult to determine exact cash values and alternative methods like surveys or expert opinions may need to be used to estimate costs and benefits.

Which of the Following Statements Regarding the Cost-Benefit Analysis Is